China, QCT Margins in Focus for Qualcomm (QCOM) Investors Ahead of Q1 Report - Cowen

Cowen and Company is commenting on Qualcomm (Nasdaq: QCOM) ahead of the company's Q1 report, which is expected out after markets close Wednesday, January 28th.

Analyst Timothy Arcuri is looking for Qualcomm to post Q1 revs and EPS of $6.8 billion and $1.24, respectively, which is just shy of consensus estimates. Arcuri commented, On QCT we model 260MM
chipset shipments (the midpoint of 250-270MM guidance) w/ASPs down ~5% Q/Q (in-line w/guide due to mix-shift to thin modem (e.g. AAPL)) and ~20% OpM (down ~160bps Q/Q). On MSM units, AAPL builds remained strong but Samsung channel purge was likely still a headwind, limiting upside. On QTL, our proprietary operator database shows net new global CDMA-based connections up ~7% Q/Q in CQ3:14.

Key items to watch into the report include:

1. Comprehensive China headwinds update, including latest on NDRC investigation, QTL royalty collection, and licensee growth trends;
2. latest views on C2015 China LTE mix and TAM growth;
3. commentary on QCT margin trends and Snapdragon 810 ramp, including potential commentary on Samsung situation;
4. updated F2015 QTL ASP + TRDS guidance; updated C2015 3G/4G TAM guidance;
5. update on connectivity as it makes a renewed push vs BRCM; and
6. updated F2015 guidance.

Cowen has Qualcoom at Outperform with a price target of $79.

For an analyst ratings summary and ratings history on Qualcomm click here. For more ratings news on Qualcomm click here.

Qualcomm closed at $72.61 yesterday.

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